Place/Date: Vilnius, Lithuania - October 27th, 2021 at 1:00 pm UTC · 3 min read
Drops announced today the upcoming launch of its NFT lending platform, with the testnet set to mark the initial phase of its mainnet launch. The Drops NFT lending ecosystem seeks to bridge the liquidity gap in NFT markets by enabling participants to use their metaverse items as loan collateral.
With NFTs gaining popularity, Drops is optimistic about tapping into this growing ecosystem to provide the much-needed liquidity solutions. The Drops NFT lending platform introduces an avenue to collateralize idle NFTs, creating a more liquid market where users can obtain loans and earn an extra yield.
Drops Founder & CEO Darius Kozlovskis said:
“NFTs have become the centre stage of crypto discussions in the past few months. However, the latest crypto market crash revealed underlying liquidity issues in this upcoming niche. The Drops NFT lending model is designed to introduce liquidity in NFT markets by bridging the metaverse world with Decentralized Finance (DeFi).In doing so, we believe that NFT owners can derive more value from their idle assets.”
The platform will be rolled out in three phases, kicking off with the testnet, followed by an audit, and finally, the mainnet release. NFT owners who wish to participate can submit an application form, after which they will be guided on how to take part in the Drops NFT Loans testnet.
Drops will leverage its native tokens dNFT and dTokens to represent NFT collaterals supplied to the platform’s permissionless pools. NFT owners who supply their digital assets to a particular pool can use the native tokens to borrow from the markets or repay outstanding debts. As for the collateral factor, each market will have a factor ranging from 0 to 1 to represent the portion of the underlying asset value that can be borrowed.
The Drops lending platform currently enjoys a total value locked (TVL) of $6.2 million, a figure that will likely increase as more metaverse participants join the Drops community.
Darius Kozlovskis added:
“We are excited about the future of the metaverse given its potential in building global digital communities. The Drops NFT lending platform provides a perfect starting point to contribute towards the growth of the metaverse. In future, we anticipate integrating more DeFi opportunities to support the mainstream adoption of NFTs and digital ecosystems.”
Drops is a premier NFT lending platform that allows metaverse item owners to use their digital assets as collateral for loans and in the DeFi ecosystem to earn an extra yield. The Drops protocol leverages permissionless lending pools, enabling digital assets such as NFT collectibles, metaverse items, Financial NFTs, and DeFi assets to be used as loan collateral. At the core, Drops value proposition is to decrease the selling pressure of idle NFT assets by creating avenues to obtain instant liquidity or earn a passive yield through DeFi ecosystems.